Data & Research May 7, 2008

High-Net-Worth Rely on Do-it-Yourself Advising

Forty percent of high-net-worth individuals are concerned with the risk of not being able to live comfortably on their available level of income in retirement, said a survey from Phoenix.
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Half of those surveyed said they worried about inflation eroding the value of their income (up from 42% last year), according to the survey from The Phoenix Companies, Inc., monitoring the attitudes and financial behavior of high-net-worth individuals in the U.S.

The mortgage crisis might not have had as much of an effect on high-net-worth individuals, as the majority (60%) surveyed said they do not consider home equity as part of their retirement savings, said the report of the results. Nearly half (49%) of high-net-worth individuals see real estate as a safer investment than the stock market.

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DIY Advising

The survey indicates a trend toward do-it-yourself advising, as 50% of high-net-worth respondents said they rarely seek professional advice when making a major financial decision (up from 45% last year), and 41% do not have a primary financial adviser.

When asked about their financial decisionmaking, 29% said they “make all their financial decisions completely on their own with little help from anyone,’ the survey said.

Growing Pessimism

Half of those surveyed expressed pessimism in regards to the economy for the next one to two years—a 20% increase from last year, the results show. Thirty-six percent expressed optimism and 14% were neutral about the economy.

The report pointed out that the survey—collected in February and March—was conducted before the Bear Stearns meltdown.

Harris Interactive collected responses from 1,900 randomly selected individuals with net worth of $1 million or more.

Products May 6, 2008

F-Squared Investments Introduces SMA with $15k Minimum

F-Squared Investments, LLC, will introduce a separately managed account (SMA) dubbed the Individually Managed Account (IMA).
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The IMA product features investment minimums of $15,000 and all-in fees to advisers of 0.55% annually (inclusive of all costs including trading, custody, performance reporting, and transaction costs).

“We believe this product defines an entirely new product category for advisers and their clients,’ said Howard Present, President and CEO of F-Squared Investments. “It not only delivers on the original promise of SMAs by reducing minimums from $100,000 to $15,000 and cutting costs an average of 45%, but now positions the IMA as a potential substitute product for mutual funds, significantly reducing costs while adding customization and full tax management capabilities.’

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F-Squared Investments’ IMA will be available to registered investment advisers (RIA) via the FOLIOfn trading and custody platform (www.folioadvisor.com). Included in the pricing is fully automated customization and tax management overlay for all client accounts. FOLIOfn also offers the ability to download client account data to many of the accounting platforms in the industry.

F-Squared Investments’ IMAs can be invested in any of five actively managed model portfolios, which are designed to track the performance of specific AlphaCycle Indexes. The five investment options now available include: large cap core, large cap growth, small cap value, small cap growth, and financials.

Advisers who want access to any of F-Squared’s IMA products can access them by contacting F-Squared at www.fsquaredinvestments.com.


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